Pro Cycling’s Sponsorship Crisis

Tuesday, 24 June 2014

For once a genuine international brand was buying into pro cycling as a means of marketing but once it got the chance to quit, Belkin exercised a break clause. The team is now scrambling for a replacement sponsor and to hold onto its core riders.

Is this a sponsorship crisis or should we confront the fact that pro cycling isn’t a vehicle for an international marketing campaign?

Pro Cycling = Ghana
Ghana’s a fast-developing country in West Africa. It’s promising, has some some valuable exports from aluminium to oil to cocoa. Better still, it’s got government bonds with a 25% interest rate. That’s right, invest 100 Cedi and you’ll get about 125 back at the end of the year if you’re lucky. Sounds great but what’s it got to do with sport? Well this is the proposition from pro cycling too – it’s such a cheap sport that if a sponsor invests €10 million in a pro team they’ll get big rewards in publicity, a rate of return few sports can match. Only with rewards come risk whether it’s marketing or bonds and in cycling this takes the form of repeated doping scandals. It’s been a while since we had one but there have been so many that the perception of cycling as a risky sport is understandable. No marketing manager gets fired for sponsoring safe sports like tennis or golf but align your brand with a pro cycling team and those valuable naming rights might prove a long term liability. The Festina scandal, the US Postal conspiracy.

Pro Cycling = France
The next problem for a global brand is that pro cycling isn’t global. There might be races in the US and China but for a sponsor it remains very Euro. Take the Tour of California, it reaches plenty of US cycling fans but doesn’t necessarily go much further with a TV audience measured in the hundreds of thousands rather than millions, great for Trek and Cannondale, less so for Belkin and 21st Century Fox. Teams like California as a way to show of their bikes to existing cycling fans but if you have a consumer product then you’re not going to crack the US market on the back of this race. Instead the sport is dominated by the Tour de France and consequently host nation France assumes a lot of the airtime, audience and attention.The chart is from a report by Repucom, a media agency and above shows the cumulative TV audience for the 2013 World Tour. This means counting the same viewers again and again if they tune in again and again to watch a race. It’s also the World Tour calendar meaning no Tour of California and other US races. But look at the numbers, France tops with more than Italy and Spain, the next two countries combined. Obviously having a grand tour helps because it means three weeks of beaucoup television but look elsewhere: Denmark has ten times the total audience of the USA despite a population that’s 50 times smaller. Sure this chart is selective but all the same it shows the mountain to climb.

We are where we are
Whatever the talk of calendar reform might bring it’s still not going to change a great deal. It can only tweak things. Belkin rightly didn’t want to stick around and until wider reforms appear other brands might not too. There are brands looking though, don’t think cycling is off-putting. It offers an excellent way to approach a core demographic in Europe for a good price. The more the sport avoids a scandal, the more new sponsors will start to emerge.

Is there a shortage of sponsors?
No. Even the smallest Belgian, Italian or French junior race sees a field line up with club riders sporting the textile equivalent of Shinjoku by night. Instead there’s just a mismatch between the demand and supply for World Tour teams, 18 teams but not 18 sponsors with a budget to pay for it. As said on here before, reductio ad absurdum if it was cheap enough then every baker and candlestick maker would fancy their name on a World Tour jersey in exchange for €5,000 a year.

This means there’s a shortage of funding and therefore competition. Back in the real(istic) world it might be that certain local sponsors and their related marketing budgets are appropriate for a national basis. Think of teams like Wanty-Gobert and Bardiani-CSF, backed by good mid-size companies but hardly big brands. Do you, as a cycling fan, know what Gobert does? And if you don’t then is the sponsorship really working? But if they get promotion to the World Tour, whether formally as part of the UCI licence process or informally via a wildcard invitation then the problems begin. Put simply a small team might have sustainable but modest budget but they’ll bump up against a squad spending four, five or six times as much as them. And they can never compete. Sure Bardiani-CSF had a great Giro and got deserved publicity but it’s not able to beat the likes of Sky, BMC, Tinkoff-Saxo for the prized GC roles nor for the rest of the year. This matters because a sport with the same teams winning the same races loses its fun. When some teams can afford domestiques on pay deals greater than the leader gets at a smaller team the game is skewed and this is before we consider the spend on coaching and support. It’s reminiscent of the tale of a lawyer, an investment banker and a CEO who are sitting at a bar feeling well to do and then Bill Gates walks in and suddenly the three are plunged into relative poverty: we have many sustainable and well-funded teams but it’s not enough when an oligarch walks into the room.

As such the World Tour resembles the English Premiership where some well-bankrolled teams are funded by Emirs and oligarchs with near-bottomless wallets at the top tier, there’s a mid tier of teams and then a lower-tier of desperate squads trying to stay promoted. Only in cycling there are few cash rewards to promotion and no ticket sales: only the publicity coup of riding the Tour de France where teams can sell the “real estate” on their jerseys and shorts. But given the predominantly European exposure of the sport this is for European brands or companies looking to crack European consumer markets.

But these companies are needed because there are more brands than there are pro teams. If we want a steady stable of pro teams then we need a continuous supply of funding. It means that if Belkin decides to step away then Gillette, Hyundai or Michelin are waiting for this space to open up and come in with funding to match the publicity available. Note the World Tour would be fixed if we had 19 oligarchs, billionaires or Formula 1 driver chasing 18 teams too.

Thanks for the ride

Summary
Belkin are leaving and in part because cycling’s audience demographic isn’t global. The company’s withdrawal isn’t an isolated case, they might be the only name leaving but look at all the companies that never came to the party in the first place. Let’s hope not but it’s possible the World Tour has fewer than 18 teams next year.

There’s no shortage of sponsors but there is shortage of large brands queuing to offer a steady source of funding for the teams. But the sport doesn’t offer a global reach, instead it has a Euro-centric market, no bad thing since we’re talking about some of the wealthiest consumer markets in the world but as such it can only be one element of any sporting sponsorship for a global company. But the promise of cheap publicity is seen as a sign of risk rather than a bargain.

Definintely a worry for the sport and difficult to see how the model can be changed. A few team owners and pundits go on about sharing TV rights money with the teams, but as you have written before the sums involved do not appear sufficient.

A very important point. If you compare those figures with Rugby, for example, then the viewing figures are much higher (based on a swift back of the envelope calculation) but they attract some very big sponsors. The reason being, of course, the attraction of prawn sandwiches, Chablis and a couple of hours in the VIP seats. Perhaps the World Tour Teams could arrange the odd Criterium during the season to attract those sponsors.

Though rugby also gets a page or two in the daily papers every Sunday and Monday, and internationals have substantially larger viewing figures. (Some of the clubs’ backers pay their sponsorship money in return for tickets to the international games, which are great for client entertaining.)

Cycling fans – and journos – have a tendency to complain vociferously when a race hives off a piece of prime roadside space for VIP tents, and/or makes changes to the route to better accommodate nice money-paying VIPs…see RvV and the Kwaremont, for example.

Some people might need to make some mental adjustment to the ‘cost’ of luring people who actually hand over money for a race experience.

I even saw some fans who watched the Saitama Criterium via a feed last year, complain that the race and its outcome was clearly a set-up….

In theory track cycling should be ideal for the sponsored social events as the whole thing is visible and contained. But the top end is run as national teams with limited sponsorship and the TV market is pretty much non-existent. The six day races are part way there but have limited exposure and may not have the limited event duration to keep it within attention boundaries.

A hugely important point. We think of marketing as retail, but almost 90 percent of sales are business-to-business, along the supply chain. Cycling gives a sponsor a chance to bring key business customers to nice places where they can be wined and dined, then watch their team whiz by. Look at the problems the TDF had with sponsored VIP cars a while back. That’s where the real sponsor action is happening.

F1’s an interesting example of this kind of setup. It can easily cost over a million bucks to put a small square of advertising on one of the wing mirrors. But firms do it because they can say in their other advertising that they’re ‘in partnership’ with the team, as well as the benefits of bringing customers and staff to the event.

Again, to use Gobert as an example, it may not mean anything to most people watching the actual cycling, but the cycling probably means something to people who read their brochures, or their website. And that’s aside from the jolly they can take clients/competition winners on when there’s a race in town.

You make a good point about whether people are actually aware of what sponsors actually do? I suspect that some of the sponsors are themselves cycling fans rather than seeing the venture as a huge marketing exercise, partly due to the accessibility of some of the products. A few weeks ago I tried to make a special note of any cycling sponsors that I came across during my everyday life. I excluded anything seen in a bicycling shop as that seemed to sort of defeat the point of the exercise and must confess that I didn’t study much more than UCI World Tour and Pro Conti Europe jerseys in prep. The results of the exercise?

Living in London, I managed to passed three different opportunities to buy a Sky TV package within the first 10 miles of my commute, then stopped counting. During this time I also passed the local Europcar branch. After that things got more difficult. A weekend trip to the local DIY store brought me the opportunity to purchase some Quick Step flooring and the local angling supplies store advertised Shimano gears. And that was pretty much it until a peeling poster on a buildboard last week tried to get me to holiday in Venezuala (secondry sponsor of Androni) and a Saturday trip to the local deli revealed they stocked a range of Neri Sottoli products. Which turn out to be very nice.

When I moved to Germany I signed up for a phone with T Mobile, based on the fact that I recognised the name through cycling. This direct contact is obviously more difficult with a steel making company but it certainly increases brand awareness. Whether it affects casual observers of the big races I’m not so sure.

You’ve hit the nail on the head. I’ve thought for some time the biggest probablem has always been the teams sponsored solely (largely) by bike companies. It was more a reflection that the depth of companies (outside of the cycling industry) wanting to sponsor cycling was very low, and pointed to an unhealthy proposition for sponsors.

There are many European companies that exist in emerging and less cycling-experienced markets and would be in a reasonable position to support a cycling team and spread their profile outside Europe. Carrefour is a great example – a French brand with stores in the Middle East, S America and Asia. I know it is a major presence at the TdF so maybe they think this is a better return on their investment.
Car companies would be another obvious choice. Skoda provided team cars though I would have thought that a team sponsorship might give greater exposure.
I certainly agree that the drugs are more of an issue for support by teams than they are for support by fans of racing. Everyone I talk to about cycling mentions it within the first 10 seconds or so…

I think the Skoda example you mention is interesting as through the provision of cars at the Tour Skoda gets a lot of product on TV at the only race most of the world is watching, some great branding at the finishes and behind the podium/TV interviews – but doesn’t run the risk of one of its riders being caught doping. Plus, even if it is more expensive pro rata than sponsoring a team it is surely an easier sell to the board? The exposure is measurable as the event is broadcast by major networks, it gives targetted access to an audience beyond committed cycling fans and is lower-risk than starting Skoda Pro Cycling…

+ 1 – in Australia Skoda has for several years had wall to wall advertising during the Tour telecast which I think has done a lot to raise their profile here, so they clearly have a strategy built around the races rather than the teams.

A car manufacturer as main sponsor of a team seems silly. Why try to use one form of transport to advertise another. Cars are a way to carry your bike(s) when useful, watching a bike race doesn’t make me want to jump in my car and go for a drive up the nearest col – quite the opposite. The Škoda branding at the TdF works because you see the cars as tools in use to transport something – practicality and reliability – get a better VW for less money. No romance just prompting people who need a new car to think a little.

I can give you one example but…I do know of a guy who placed an order for a Jaguar Sportbrake on the basis of being drawn in by the promotional stuff (videos and the like) put out by Sky and Jaguar, and then seeing the car in ‘person’ at races and falling for it.

I don’t think this is such a disconnect. In the U.S., the mean and median income of a road cyclist is quite a bit higher than the mean and median income of the general population. This is quite a nice little market that automakers would want to have a piece of. Also, almost every road cyclist has a car, I’d be surprised if more than 0.1% of (American) road cyclists do not have a car. I’ll tie this two points up by saying that on all century, gran fondo, or any cycling event I’ve gone to, there is a preponderance of German luxury car brands carrying bikes and hitches. There have been carmakers who sponsor ProTour teams, or ProTour aspirants, namely Nissan, and Subaru respectively. Cadillac sponsored Rock Racing while it lasted, and Audi sponsors a very large group of amateur riders in California, Honda dealers have their names on a lot of club jerseys. Honda also sponsored a women’s Pro team.

Good take on the sponsorship situation. I don’t think there was ever a point in time when obtaining major sponsorship was not difficult. I remember the French pro scene being down to one or maybe two at most sponsors. The same with the Dutch and present day Italy, whilst Germany struggles with no current pro tour level sponsors. Not an ideal situation, and one that is going to be impossible to alter given the present model, demographic and costs. I assume the sport will simply blunder along until someone comes up with a better model. I agree that any future model can not involve taking money from one sector to underwrite another.

“Belkin are leaving and in part because cycling’s audience demographic isn’t global.”
They knew this from the start I assume? So if this was a problem for them why did they get in in the first place? I don’t assume they hoped it would change within a year, presumably they are not that stupid.

I find it quite disappointing that despite 2 Dutch WT teams and a 4th place in viewership there is no Dutch sponsor in the WT.

Belkin saw an opportunity to sign on before the 2013 TdF and carry through this years TdF with an escape clause. The TdF is the ultimate cycling advertising marketplace. They got reduced advertising at the biggest event, then bolted. Smart strategy in my opinion.

The WT needs to be reduced to 12 well funded, but salary capped teams. Cap them at 28 riders. Bring in another dozen or so Pro Conti teams that also are salary capped max and min with a minimum roster of 16 riders. This is to prevent WT teams paying bigger salaries to roster fillers than the stars can get at the Conti level.

Allow WT to opt out of 4 or five races that don’t suit them or their demographic.

I think it’s a combination of factors that explain the lack of Dutch sponsors at WT level – this is by no means definitive, just my local view.

Culture: Yes, there is a vast cycling culture here: at least 1 bike per person, or more depending on which stats you read. But that doesn’t translate into a culture around racing, certainly not to the degree that it does in Belgium. Since the Armstrong revelations, the national broadcaster NOS has pared back an already lean live coverage schedule. The Dutch do really love the Tour though, probably because of the association of summer camping holidays in France, but mention the Giro or the Vuelta and only cycling fans know what you’re talking about (I know people who ride bikes every day and had no idea of or interest in the Giro ‘grande partenza’ in Amsterdam).

Sponsors: Big (potential) sponsors put their money into other sports as cycling is seen as too toxic – let’s not forget that Rabobank, rather than pull out entirely, was willing to honor its financial commitment to the team but didn’t want their name associated with it, hence Team Blanco (aka Your Name Here). And Rabobank still sponsors women’s and juniors teams, and frequently attach their name to ‘toertochten’ (gran fondos). They sponsor football (ING), hockey (Rabobank, ABN Amro), tennis (ABN Amro), and golf (KLM). Other big Dutch multinationals like Philips, Unilever and Ahold probably don’t have much to seek in terms of new markets via cycling sponsorship – though they own so many brands, perhaps they do offer some minor sponsorship to races.

Winning Isn’t Everything: Other successful sports can’t find sponsors either: the Dutch cleaned up in the long-track skating events in Sochi in February, but long-time sponsor TVM (which many may recall as a famous cycling sponsor as well) decided to stop and the sport’s top 2 stars have had to find new teams and sponsors.

It’s important to note that the only real issue at the moment is in team sponsorship, not necessarily sponsorship in pro cycling. There is a long list of brands happy to associate with races, as they are relatively more immune to scandal than teams.

While teams may grumble about revenue sharing, perhaps they should look at why brands are picking races over riders? The argument that sponsorship is cheap is a self fulfilling prophecy that lowers the value of the sport. Cycling should be looking at sports like golf and tennis for sponsorship tips.

Not quite, there is also a long list of races that have been cancelled or scaled back, particularly in Spain, Germany and France. Many were subsisting on the largess of local/regional governments, rather than corporate sponsors and failed when the public money dried up. In the USA, the Tour of Georgia, and the Tour of Missouri never made it after the the original sponsors left.
The new desert races (Oman, Dubai etc) are just the race equivalent of the rich hobby teams ie vanity projects financed by oil rich sheikhs /kings.

That’s not entirely fair. Many Tour ofs .. exist to promote the areas they visit as tourist destinations and if the pros appreciation of their accommodation is a recommendation then we’d all be off to the desert. They are after exposure for their location so TV exposure is key but if that is not available then there is little left in it for local/regional governments.

I’ve seen this in practice with Rapha Condor JLT. Weekend in the peaks with the squad of household names (Ed Clancy) Saturday they did some guided rides with JLT staff and customers and day 2 was a Rapha invite event.

They laid on food, had some rides, Q&A with the guys and chance to take out a Condor bike and look over the team Skodas. Buying old team kit for super knocked down pricing was good.

With the rise and rise of the casual cyclist, in the UK at least, I thought that this must have been a great way for JLT to get a lot of people involved.

Rapha has pulled out now, so not sure if they weren’t getting the same return they were hoping for.

Does this translate to a world tour team where your customers are more dispersed and the opportunities restricted, I’m not so sure. Cycling is such a noble form of pain, perserverance and team work that you’d think it was perfect for a brand to use those ideals to help promote itself with sponsorship

The sport is way-past-due for a reality check. My first live visit to LeTour was back when the official drink was Perrier and the cars were Peugeots. A guy rode around on the top of a car playing the accordian. Then came Greg LeMond (actually by this time he’d won it once, but the effects came later) and the multi-nationals, mostly based in the USA. Guys like Verbruggen started thinking they had the equal of F1 or the World Cup in potential marketing potential and profits. Big money flowed in, inflating everthing. BigTex came next and away the sport went, bigger budgets, bigger paychecks, etc. That’s all done now. ..it was never going to last. The sport and fans must adjust their expectations to match reality. The success of the Brits at LeTour has had little effect in pumping things up as in the LeMond or Tex days. Meanwhile a heck of a lot of REAL cycling fans made their way up the Zoncolan a few weeks ago to watch their heroes. I don’t (excluding doping scandals of course) think the sport’s in that much trouble, it’s more a case of unrealistic dreams of riches based on a very brief period of international interest from global corporations. For the immediate future, it’s obvious that is not going to continue, so the sooner the stakeholders take measures to rein in these inflated budgets, team requirements, etc. the better.

The market, however, is skewed by oligarch/sugar-daddy team owners. The adjustment you call for will not come anytime soon, at least not without imposing budget caps for teams. I think sponsorship needs to become a secondary revenue stream. If teams had more stable WT licenses, then they could attract investors and not just sponsors (as JV has suggested in the past).

Interesting that China registers on the Repucom chart, and quite highly at that.

While the size of the population makes almost all viewing figures look amazing, it surprises me that cycling gets nearly 172m impacts in a country that – as far as was aware – had zero interest/background in competitive cycling.

It’s a topic for another but how we watch the sport is another issue. Most readers here equate it to live TV but for many “viewing” means 90 seconds highlights during a TV news bulletin or perhaps a weekly sports round-up. Therefore if the Tour of Beijing gets on the evening news in China it’ll get a good score, although it is on live TV too.

Compare China to Belgium. We have a population of 11.5 million whereas just Shanghai where I do business has a population of around 15 million (more of you include more outlying areas). The factory owner I work with and I were having a conversation and it boiled down to that if you can just reach 1% of China’s population, you can be a rich man. He’s right, 1% is more than the population of Belgium (13.5 million people).

So the fact that there are so many viewers is not a surprise (least of which is the fact the Tour of China is World Tour) and included in report. Also, I forget where I read it, but I think China surpassed Germany in out of country tourism this year and $$ spending abroad.

I was kind of surprised to hear Belkin was jumping ship. Their riders have done a pretty darn good job, I’d say.

Cycling is by far my favorite sport at this point. I ride daily, watch a lot of the races. I’m of mixed feeling about the growth of the sport. Some other sports that I played/followed grew in popularity and to be honest, they just seem cheap and generic now, so I can’t be bothered to pay attention to them. Rule changes, changes in how the game is played, etc. I’m wary of this happening to cycling.

Cycling popularity – I know PRO racing isn’t commuting, but I think they are connected a bit. Maybe. I’m part of a cycling advocacy group in my city and while I’m all for better cycling infrastructure, I’m also wary of the growth of the cycling population. Why? Well, the city itself is growing and I see more and more cyclists…and more and more easy targets for distracted drivers. Cyclists without light, with terrible bike handling skills, no helmets, earbuds in, running light, riding right up against parked cars, riding on busy roads when quieter ones are one block over.

It also frustrates me to no end that the NBA, NFL, and MLB are all popular sports in the U.S. I see them as being part of the problem. Overconsumption of everything, disregard for the environment, extremely long seasons. I could go on, but I absolutely despise those sports. And the fans. So many are overweight, distracted, generic people just growing fatter and more bloated by the day.

And then we have doping. The NFL is FULL of players absolutely doped to the max. If they tested like they test cyclists, I bet 75% of the league would be dirty. Baseball too. I don’t think anything has changed as a result of the hearings, suspensions etc. They just want to ignore it. And tennis? I think some of those top guys are doping as well. And futbol, which I play and love. Hate to say it, but I think a lot of those European players are doped too. Hmm, Spain having a terrible World Cup after all the talk of them paying visits to certain doctors? Coincidence that they aren’t so might anymore? Maybe. Maybe not.

I love cycling, both participating and following the peloton. I have to say I have mixed emotions about it’s growth.

It is bittersweet, but Pro Cycling is going to have to shrink. It is sad, because this means that the athletes will have to take the brunt of it in the form of compensation. But the current economics of cycling are causing instability, and turning Pro cycling into a Have/Have-Nots that, from a spectator standpoint, reduce the level of competition from a Team Standpoint.

The biggest problem, is that in the age of global media, cycling is still lacking in terms of television ratings, and quite frankly, media attention except in a few European countries. Even here in the Denver/Boulder area, where Pro Cycling has its deepest roots in the US, most local residents hardly follow the sport or are even remotely aware of the talent residing here. I was driving home last night, listening to a local sports show go over famous Colorado athletes. Not a single mention of either of the Phinneys at all.

And lets not forget…a big problem with cycling TV ratings in the US…..most cycling fans are cyclists. Most cyclists are out riding versus actually watching races. Most sports that are successful are full of people who do not play the sports they watch. Cycling (outside of old women in France apparently (Hat Tip: Inrng) is watched mostly by people who love to ride themselves. I myself find it difficult to both get in the hours on the bike (and then also watch a stage or single day race) without getting my wife to go all cross-eyed and angry at making an entire weekend about bikes.

Then add to the fact, that as our lives get busier and busier, Pro Cycling is going to struggle against sports such as Soccer…..Most races are 4 hours minimum, and often, much of the action can take place earlier in the race (think any Spring Classic race). Soccer is done in 2 hours, and you see the entire competition. Pro Cycling – how often do broadcasters try to pare down the broadcast, show the last 1.5 – 2 hours, but then result in the key moves often being missed by the viewer. So damned if you do, damned if you do not. But it is tough, in today’s world, to ask people to sit down for 3 – 4 hours a day to watch a bike race (now make that 21 days for a given GT, and you can see why ratings are low) This points to perhaps making climbing stages shorter or trying to reduce the distance of some of these races and condense the parts of the parcour where a strategic move can be made to the final 1/2 of any given stage if possible.

What is Pro Cycling to do? I think it needs to shrink a bit quite frankly. The UCI and Promoter need to think long-term and work at building grass roots interest in bike racing, to develop fans not next year, but 10, 20 and 30 years from now in countries outside of the France/Spain/Italy/Belgium locales. As someone who used to race as an amateur, one of the biggest complaints with US Cycling and the UCI in general, was an utter lack of care for the grass-roots. But unlike many other sports, I think you need to have suffered up a climb to truly appreciate the pain, suffering, and joy of watching 2 – 3 guys battle up a long climb in the TdF or other race. Otherwise, all you have (at least in the US) is a bunch of average Joe’s ignoring the sport altogether.

I am very fortunate that, living in Russia, I can get home and watch at least the last hour of each days racing in the GT’s. I assume most people in Europe either take time off or rely on the highlights. Perhaps the timing of events could be looked into.

You don’t really need to watch that much. It’s the results and stories that I look for every day, and only watch race if I can.
I also disagree on the need to have experience on the bike to appreciate cycling races. Most fans throughout history were not cyclists themselves.

I had “VIP” passes to the Giro in Belfast and to be frank I was quite disappointed, I got a very medioca lunch in a tent which didn’t have tables big enough for more then 4 people to sit round. But I did get a reasonable spot on the barriers to watch the finish. I’ve also been lucky enough to get VIP treatment at football, rugby and F1 where the day out has been amazing and a real life time memory. Cycling seems to do little more than stick a name on a shirt and offer the odd trip in a car.

Posibly part of the problem is the teams, firstly their names. Its hard to get behind a cooperate brand. Its difficult to support Quickset or Sky, much easier to support a more natural Liverpool.

F1 teams do amzing things with sponsorship, they work very hard for the money they receive. Maybe Alonso will shake things up a bit. I agree that cycling is probably more akin to rugby.

I get the impression that the big multinational profile companies are happier sponsoring the races (e.g. Skoda, Coca-Cola) or being the co-sponsors of professional teams (e.g. Sharp, Jaguar, 21st Century Fox – and Honda in women’s cycling)

We need a salary cap to control the wages. That instantly puts the corporate sponsors on a level playing field with the billionaires. If you set the wages so that teams can only buy one or max two stars and everyone else is a well paid domestique, all teams are then on a level playing field. This means that company X can come in and sponsor a team and know that they will have a fairly fixed wage bill and know that they will have the same shot at attracting a real GC contender as any other team. I know that its hard to police but just cause its hard to do, doesn’t mean it isn’t worth trying. Other sports have managed it successfully.

I also been wondering why we don’t have races that are title sponsored like you see in other sports. Think Heineken Cup in rugby or the Sky Bet Championship in football. Why don’t we have “The Coca-Cola Rud de Sud” or “Wheetabix Tour of Britain?” Or take it even down a level…so you’d have commentators saying stuff like “this years ascent of the Tourmalet is proudly sponsered by Hertz” with Hertz banners all the way up the thing or whatever. Believe me I know how crass that all sounds but if you want to get money in the door, you need to sell everything you have the opportunity to sell.

I realize that this would go to the race organizers but it would mean more money into the sport and then you can have a potential discussion about revenue sharing of TV and / or sponsorship money.

There are races like Amstel Gold. (Beer) The Ster ZLM tour (whatever that is), Larry H Miller Tour of Utah (auto dealers, sports franchises, movieplexes). The Tour Of Utah also has stage sponsors.

But I get your point. Bringing in sponsors for the races, stages, or portions of the race help. The real issue is the race organizers have to kick some of this back to the teams. This reduces the burden on teams to travel and hotel at races in far flung locales. It also allows for smaller budget teams to be more profitable and pay more competetive salries.

One of the reasons many WT teams are willing to come to Utah for a .1 race is the accommodations are centralized in the Salt Lake area. Less transfer time for riders and team management. The race also gets the five star hotel to foot a big part of the bill in return for sponsorship. The ToU also provides appearance fees for the teams to help offset their travel costs.

While these strategies benefit races and race organizers, it rarely benefits the teams.

ZLM is a small local insurance company. Ster means ‘star’ and refers to the name the race had before ZLM became the sponsor (‘ster der beloften’)
Some other examples would be the Amgen Tour of California (pharma) and Eneco Tour (electricity)

Is part of the problem the ephemeral nature of cycling teams? If a big sponsor wants its name on the jersey of a football team then it knows its buying , among all the other things, a solid club with a long history and a huge fan base who will either turn up every week to cheer on the team or at least watch it on TV. As cycling teams come and go there isn’t the chance to “build the brand” in the way there is with other sports; there will always be a Liverpool FC regardless of who the main sponsor is, you can’t say there will always be a team Sky.

To use some numbers if you go back just 5 years, out of the 18 UCI World Tour teams 13 were in existence and racing at the World Tour level, but out of those 13, only 3 had identical names to now (Katusha, Astana and Ag2r-La Mondiale), 6 had slightly different names (Silence-Lotto, Française des Jeux, Lampre-NGC, Quick Step, Team Saxo Bank and Garmin Slipstream) and the remaining 4 had completely different names and sponsors (Bbox Bouygues Telecom, Caisse d’Epargne, Liquigas and Rabobank). For the casual fan it’s hard to form an attachment to a team and cheer them on when you’re not even sure who they are year to year or whether they’ll even last.

Still, even having fans chanting the name of a sponsor could be of limited utility depending on the nature of a sponsor. For example after Amstel Gold Race this year I happened to be in a bottle shop and on a whim grabbed some Amstel Gold beer to see if it was as enjoyable as it seemed to be for Phillipe Gilbert on the podium (to be honest, it was a bit bland, but then I hadn’t done as much to earn a thirst as the BMC rider had). Now say I enjoyed watching Rui Costa win the Tour de Suisse for the 3rd time last weekend, but as I’m not in Europe and not looking to buy pre-coated steel, those sponsor Euros are not going to translate to me, the cycling fan, purchasing the sponsor’s product or service. Another example, when my parents were in Europe recently they chose Europcar because they enjoy Tomas Voeckler’s facial expressions every July. My point being that I think sponsors are always looking for some sort of return for their investment, with bike brands sponsoring teams that’s easy, but until other companies who don’t have cycling mad CEOs start seeing value in it I fear this era of uncertainty will continue.

Yes, the UCI does spend some money. It commissioned the Repucom report of which an extract features above.

But as said before the World Tour concept isn’t well understood, the whole concept needs to be fixed and starting with simple things like a functioning website. http://inrng.com/2014/01/uci-world-tour/

I gather a new UCI website is on its way, let’s hope it’s more appealing. Examples from Formula 1, the WTA etc are obvious

Just a cursory look at the websites of those maligned US megasports, NFL.com, NBA.com, MLB.com makes me wonder how much revenue they generate from sales of all their team-related gear. In addition to current info on every one of their owner-member teams (sport controlled by owners, not by some quasi-governmental agency) they’ve got enormously successful marketing departments churning out daily tidbits for their tifosi – and there are heaps of them. Do we need to say, “Thanks much UCI, but I think we’ll just handle our business all on our own from now on” in order to jump into the 21st century business of sports?

The UCI, like the FIA is responsible for some much more than professional racing so it is no position to use it’s funds to support what is, in fact, a tiny proportion of it’s stake holders. Perhaps they should get Bernie in to help, he may soon have some time on his hands.

Tom Simpson, your post made me do a little digging. The US megasports you allude to produce annual revenues of over 50 billion U.S.$, with sponsorship, gate receipts, and merchandise, the merchandise sales alone accounting for a tidy $11 Billion/year. That’s a lot of Molteni jerseys.

On a bit of a tangent, but nonetheless related to sponsorship, I was thinking about the announced exclusion of Nacer Bouhanni from Le Tour, and it brought on a question for which there may be no consistent answer: what is a TdF stage win worth to a sponsor? And what is the relative value of a high GC placing? As many teams field a squad mixed with sprinters and a CG hopeful or two, I wonder what GC placing might be as valuable as a stage win to a team/sponsor. For example, is it better to have captured a stage victory than a top ten GC? Top 5? The fact, is most people only recall the podium, that being the obvious visible reference.

Most american mega sports derive the majority of their revenue from tv or broadcast rights. The money tv networks throw at a sport are often times sickening. It is not just about the advertising revenue, but also about promoting future programming while tens of million of eyeballs are glued to a particular event. Especially the NFL.

Many sports venues are sponsored by corporate America. Hence you have AT&T Field as opposed to San Francisco Stadium. One of the bigger revenue streams involve corporate suites at the venue. Very hard for cycling to do as the venue is constantly moving.

Cycling needs to funnel a portion of revenues back to the teams. Or better yet cyclist salaries. The NFL Players Association receives 55% of tv revenues and merchandise sales. This goes directly to player salaries, insurance pool, and pension fund. The team owners take the other 45% but are taking in ticket revenue as well as corporate suites and advertising.

The UCI needs to emulate this model to ensure teams have an equal playing field and can stay afloat even if a sponsor bails out mid season ala Belkin, Euskatel, Rabobank, etc.

What a good article and nice to see some well thought out comments. Teams in road cycling at the top level have always struggled to retain their main sponsor (except in a very few cases) for more than a few seasons. It seems that ‘sponsors’ will move on after a time whether or not they have achieved their goal in terms of increased recognition. I think that it is, therefore, a case of trying to encourage a sponsor to stay longer (how? I don’t know) or getting more smaller sponsors to be involved. I like the idea of having some sort of league with promotion and relegation to try and bring more interest into the sport but, again, I’m not sure how you would get this to work. Perhaps have two three week tours, two two week tours and two one week tours together with up to ten one day races all counting towards the overall. Just a few thoughts but something must change to keep the sport attractive to potential sponsors.

Good piece, as usual.
Since the dimension of the sport is not global but chiefly European, the best sponsors should be those that focus basically on the European market. Cycling should be to the EU what hockey and la crosse are to Canada: the identity sport, ingrained in the Constitution. 😀

Thanks to Inner Ring for raising the sponsorship issue again. This has been the same story since cycling time began. Eddy Merckx had different sponsors. Bernard Hinault had different sponsors, and sometimes teams had trouble with funding. Teams ended for the same reasons in the 60s, 70s, 80s, 90s, and now.
The trouble isn’t with the teams. The trouble isn’t with the national federations, or the UCI. The trouble is the race model developed by media companies who wanted to create an audience for their products by staging sports events hasn’t evolved a millimetre since the start of road racing. Your biggest evolution was the addition of time trials to stage races. The world has evolved, technology has evolved, but there hasn’t been any innovation from the race organisers. Coppi and Froome are racing the same race today, but just with different equipment and different sponsors.
It doesn’t mean you build stadiums and watch a circuit like Formula 1. It doesn’t mean you reduce the size of the teams. It requires innovation from RCS and from the ASO. There are ways to create gate receipts like other sports if instead of having four different climbs, you have the same climb featured four times. RCS under Michele Acquarone started to incorporate finishing circuits in some of their races in order for the fans to see the riders ride by more than once. Maybe it could have led to a way to create an admission. I don’t know.
The problem is race organisers have no reason to make any changes, because they make their money. So the UCI, the teams, the sponsors are going to continue to experience the same problems until they put pressure on the race organisers to innovate the product in order for all to have more revenue. Maybe then the race organisers would be more willing to share TV revenue if innovations proposed gave them more revenue than they receive now.

My 30 second fix to all of cycling’s problems (tongue firmly planted in cheek):

1.) Reduce the size of teams on the road to 6 per team. Will allow more teams to participate but will keep costs down per team. Less predictable, more exciting racing= better viewership.
2.) Force all bicycle manufactures who want their bikes ridden in the World Tour to pony up for a full-on title World Tour sponsorship. It sounds unlikely and kind of a BS move by the UCI, but in a single swoop you could stabilize the sponsorship market significantly. In a world where the current idiocy is considered a business model, it doesn’t take much to improve things.
3.) For all those going on about salary caps, while I don’t think salaries are the primary problem with pro cycling, the riders would be flat out suicidal to agree to a salary cap without some form of representation–i.e. unionization.

American sports share profits; bye a Petton Manning jersey, all the teams get some dough.
I don’t know what Belkin does, but I know what mapei does. Does anybody care out a Russian bank?
Seems like cycling is just all over the place

This one line makes a very good point about many sponsorships. While I live in Belgium, follow cycling passionately and I don’t know what Gobert does. It is often an problem of ‘sponsorship actuation’ with a lot of companies, lots of name knowledge, but little connection. For most big companies this isn’t a problem, people know them, but smaller companies need to spend quite a lot to help extra to just relate their new name recognition with their service.

I’ve looked at this before. In short there’s not much money to share. It could amount to just 3% of a typical team budget… and with many races making a loss will the teams be willing to share this loss? For more thoughts, see

Greed is causing a disconnect between what is GOOD for Cycling Sport and what is needed for Growth!

Organisers need to grow their Profits for their ” Stakeholders ” , yet that will see them lose their Profits at a later date .

Teams need to be seen as ” Winners ” so chase a ” limited perceived Talent Pool “, thus a few Racers get Mega Bucks and those Racers that have as yet undiscovered/unpublicised talent toil along under ” Team Orders”. Salary Caps on the ” Stars ” could be made to work , since they will have Supplier Sponsorships to fall back on . Yes there will be cases of a Racer getting a Salary , then a ” Top Up ” from the Team through the back door , but , as long as the overall Salary/Team Budget is Policed there will be the possibility of Teams having to trim the cloth to fit the need .

Riding with Oleg T. in Val di Non , i was reminded that there was NO Saxo Bank team , i had carelessly neglected that the team was now ” T…. Saxo “!

Why are the Teams in need of the MOST Luxurious Pullmans ? At some Race Finishes they can only park at the foot of the Mountain , and as to getting to some Grand Starts , you only have to look to Belfast and Sth Italy , to see that some Teams had to have 2 of these Monsters ! Yes it would be a step back to Camper Vans , but just how much time do the Racers spend in the Pullman ?

Marginal gains has seen the numbers of Team Helpers grow from minimal Team Helpers to the extent that some Teams have more workers behind the scenes than ridingin the race . Here too there should be some Budgetary constraints . Each of these ” Behind the Scenes workers ” put in a solid day’s work but would the Team results suffer IF the cars/vehicles were not washed/vacuumed 2 x a day ?

Smaller Team Members look at the Teams with bigger Budgets , then seek Catch Up ?

None of the comments above focus on the consumer side of who is watching cycling, and whether there is a demand for it (and the sponsors’ products). As Inrng rightly points out, outside of Europe, the footprint is quite small. Even in China, reaching that fabled 1% of the population is a big ask because city dwellers who have expendable income and time for recreation don’t have open rides for leisurely riding, let alone racing and training, and rural dwellers are too dirt poor to even think of a bike for anything other than practical transport. Aside from us fans of The Inrng, the rest of humanity seems to observe bicycle racing with complete apathy–at least here in Asia.

There have been sponsorship crisis’s since professional cycle racing began. Hercules sponsored a senior British team, for one year, in the fifties and until sky came along there had been no significant stable team sponsorship in Britain. Germany had a similar situation until the Ulrich years and now field no WT teams. The French have been reduced to just two teams in the recent past and today Italy and Spain only support one major team each. The present situation is not good, but certainly nothing unusual. There are potential models for pro teams which would/could add to their financial security, without robbing hard pressed organizers. The sport is losing events because of the lack of sponsorship, despite the view expressed by some that event sponsorship is not a problem Until such times as this question in addressed, teams will continue to live with minimum security.

I can’t help feel that cycling definitely has an issue, but that it is not necessarily its lack of global reach. I’m more of the mind that cycling suffers because it sells its sponsorship on out-dated models; focusing on media exposure.

Media exposure is great, but it often doesn’t equate to tangible returns.

The issue is compounded by the fact that even as a brand exercise, it doesn’t work terribly well i.e. I’ve heard of Bardiani but have no idea what their business is, and haven’t been engaged or motivated enough by what they are doing to do a quick search to find out.

Formula 1 went through this same process 20 years ago; it was just brands on cars and drivers. It was a long process to build the required and valued ingredients.

One thing cycling teams should do instantly is to promote and assist its sponsors in any way to activate their sponsorships properly – I barely ever see any cycling sponsorship activation. I’d say that the most active brand is Garmin, and in one way you’d expect that given their products are directly relevant, but brands with less relevance need to work harder in order to drive new revenue from a market less-associated with the sport itself.

Can Track cycling (and american criterium racing) be the path to change?

Track and crits feature shorter events in a defined arena you can charge access and/or have VIP areas, it is relatively much easier to film (think of 2 mottos, 2 drones and one or two rail-mounted cameras, plush finish line cams…never mind on-bike cams capturing the bickering and shoving, carbon wheels and whirring chains) and broadcast live, commentate on, have big screen TV’s showing detailed action…
Both also make the dynamics of drafting, attacking, tactics more visible and apparent, which allows a casual fan to more quickly understand the sport. And, dare I say, Crits and Track races have ridiculous dramatic crashes that are also easier to capture on film (yes, TV and youtube audiences eat that shit up like candy)

Also, TV rights are not owned by ASO.

If properly promoted and distributed in a business-like fashion but focusing on the toughness of the sport, I really think Track and American crit racing can become an easy way to grow the sport, while growing interest and understanding of cycling leading to better appreciation of road races and stage races.

Great post.
But the reality that you highlight in it is actually the core problem of pro cycling.

What I mean is: pro cycling teams rely on brands, corporate sponsorship to exist, and that is the main problem of it, creating instability, insecurity when/where a sponsor can decide to leave whenever it wants, leaving about 70 to 90 people out of a job in a pro cycling team.

There needs to be a different structure, maybe like the north american pro leagues of baseball, basketball, football and hockey, where the teams exist (yes they are mostly own by billionnaires…) no matter what. I am not aware of the complete working of these teams but I know that they get and share television rights, get money from products (jerseys, caps, etc.), smaller teams get money from the bigger teams, etc.

AND, some of them do not have global (international) audiences, like hockey for example, which is not very popular in the south of the USA but pretty big in Canada and some of the northern states of USA, and some very few nordic countries of Europe.

The international reach of hockey, imo, is probalby comparable to cycling, albeit in different countries:
Nobody cares about hockey in Asia or South America or Africa like they do about maybe basketball, football or baseball. Yet, the professional hockey league has money, their players all make millions.

The only problem of sponsorship in cycling is the structure of it: No structure, no TV rights, very very boring TV (no graphics, no speed displayed, no % of slopes, etc. etc.), etc.